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Study Finds that Alzheimer’s Taking a Huge Toll on Medicaid Programs, Caregivers, Not Medicare

A Medicare Claims Study conducted by the Washington, DC-based Alliance for Aging Research and Milliman, a large international, independent actuarial and consulting firm, finds that caregivers and State Medicaid Programs, not Medicare, are burdened with the majority of costs associated with Alzheimer’s disease.  This study’s findings published in the June 25 issue of Journal of Managed Care and Specialty Pharmacy, show the importance of better diagnosis, treatment, and care of individuals with Alzheimer’s, which could lead to improved patient and cost outcomes for state Medicaid programs and family caregivers.

Grandmother and granddaughter preparing food together at kitchen. Photo Credit: California Department on Aging

The study, titled “The Real-World Medicare Costs of Alzheimer’s disease: Considerations for Policy and Care,” found that even though many Medicare beneficiaries are impacted by Alzheimer’s, Medicare spending on the debilitating mental disorder is low. The federal health program covers medical screening, diagnosis, treatment and only limited short-term care associated with Alzheimer’s disease. Researchers say it is family caregivers and state Medicaid programs who bear the brunt of the remaining costs of this expensive disease. The study results also stress that it is not too early to consider how to better integrate Medicare and state Medicaid programs to fund and improve patient outcomes, which will likely involve better diagnosis, treatment and coordination of care.

Alzheimer’s Not Bankrupting Medicare

“Contrary to what you might read in the media, Alzheimer’s disease is not bankrupting Medicare. While most patients with Alzheimer’s disease are beneficiaries of Medicare, it is state Medicaid programs and families that are facing most of the costs,” said Susan Peschin, MHS, President and CEO of the Alliance for Aging Research, in a statement announcing the findings of the Medicare Claim Study. “This study highlights the importance of more efficiently integrating Medicare and state Medicaid programs to improve patient outcomes when it comes to Alzheimer’s disease and dementia. We encourage the establishment of more support services for caregivers of Alzheimer’s and dementia patients, which have been shown to save money for patients and their caregivers., notes Peschin.

Researchers note that their study examined almost 340,000 Medicare beneficiaries by compiling nine years of Medicare claims data and comparing end of life costs in the years prior to the death of individuals with Alzheimer’s disease and dementia to persons without dementia. They said at the time of the Medicare beneficiary’s death, approximately 21 percent had Alzheimer’s, 18 percent had general dementia, 54 percent had no dementia, and 11 percent had Parkinson’s disease or another specific dementia at death.

Lead author Bruce Pyenson, an actuary, said that both the findings and methodology used could change the way policy makers discuss Alzheimer’s disease. “Our findings based on data from tens of thousands of Medicare beneficiaries with dementia demonstrate that Alzheimer’s disease is not bankrupting Medicare. By using Medicare’s risk adjustment methodology and by examining the pattern of costs in the years before death, our methodology avoided attributing costs to Alzheimer’s that were from unrelated conditions.,” he adds.

Pyenson noted that using big data for Alzheimer’s research is promising.  “We were able to find that poverty is an important influence on the subsequent diagnosis of Alzheimer’s disease, and the diverse patterns of diagnosis may support the view that Alzheimer’s has multiple causes.” he said.

According to the study’s findings, in the last eight years of life, the average annual Medicare cost for Alzheimer’s disease was $19,211, compared to $17,110 for individuals without dementia. In beneficiaries’ last year of life, Medicare spending for Alzheimer’s disease patients was $1,342 lower than other beneficiaries. Much of the cost associated with Alzheimer’s disease is not covered by Medicare, reinforcing the importance of policy and programs to better diagnose and treat Alzheimer’s.

Adds Jim Scott, President, Applied Policy, “There are still far too many people whose dementia diagnoses are. either missed entirely or identified in a general way, without confirming the cognitive issue. “

“Despite the availability of PET imaging which has been shown to detect the presence or absence of amyloid plaques in the brain, one of the hallmarks of Alzheimer’s, Medicare will not cover the test for the vast majority of people who could benefit from it. Study findings show that physicians change the clinical management of more than 60 percent of patients who get the test.

In many cases, people previously diagnosed with Alzheimer’s are found not to have the dreaded disease and actually have a treatable condition,” says Scott.

The authors of the study include: Bruce Pyenson, FSA, MAAA; Tia Goss Sawhney, DrPH, FSA, MAAA; Charles Steffens, ASA, MAAA; David Rotter, Ph.D.; Susan Peschin, MHS; James Scott, JD; and Ellen Jenkins, BS.

The full study is available on the Journal of Managed Care and Specialty Pharmacy website.

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